SINGAPORE: Total wages in the private sector grew 4.2 per cent last year, after accounting for inflation, up from 3.2 per cent in 2017, the Ministry of Manpower (MOM) said on Wednesday (May 29).
Nominal wages were up 4.6 per cent in 2018, a higher increase than the 3.8 per cent in 2017, according to the Report on Wage Practices 2018 released by MOM’s Manpower Research and Statistics Department.
The numbers, which included employer Central Provident Fund contributions, were obtained through a survey of about 5,300 private establishments, which employed 1.2 million people.
Industries that registered the highest growth wage in 2018 were financial and insurance services (6.3 per cent), real estate services (5.0 per cent) and professional services (5.4 per cent).
The report added that manufacturing, food and beverage services, and retail trade saw “similar or moderated wage growth”.
“The labour market performed better in 2018 compared to 2017, with strong employment growth for local residents, lower unemployment and retrenchments,” said the report.
It noted that the growth in wages occurred amid a 3.1 per cent growth in the economy in 2018, “though performance was uneven across industries”.
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Wage practices among Singapore’s private establishments in 2018. (Graphic: MOM)
A smaller proportion (45 per cent) of establishments employing low-wage employees adopted the National Wage Council’s (NWC) quantitative guidelines last year than in 2017 (48 per cent).
The main reason establishments did not give wage increases was “poor business conditions”.
The basic wage increase for low-wage employees (7.8 per cent) and outsourced low-wage workers (7.0 per cent) continued to be higher than all rank-and-file workers (5.5 per cent) in 2018.
In 2017, low-wage employees refer to those earning up to S$1,200 in basic wage. In 2018, this threshold was raised to S$1,300.
Of private firms with outsourced employees earning up to S$1,300, 71 per cent gave wage increases to these employees. This figure is higher than in 2017 (55 per cent) and 2015 (68 per cent).
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At 81 per cent, the proportion of employees who received wage increases went up last year from 78 per cent in 2017.
The proportion of establishments that raised their employees’ total wages in 2018 increased to 67 per cent from 65 per cent in 2017 – as a result of “improved profitability”.
For employees who received wage cuts, the average wage cut was higher last year (-4.3 per cent) compared to 2017 (-3.9 per cent), though their proportion among all employees decreased to 8 per cent in 2018 from 10 per cent in 2017.
MOM said the wage practices were aligned to NWC’s guidelines.
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“The performance of establishments and individuals were employers’ main considerations when determining wage change or variable payment,” the report said.
“Profitable companies gave higher wage increases and bonuses compared to loss-making ones.”
The report noted an area of improvement for small and medium enterprises (SMEs) in having good and regular communication between employers and employees – which is critical in maintaining and improving staff engagement and morale.
While 74 per cent of private sector employees work in establishments that shared information with their employees on the establishment’s performance, only about a third of employees in SMEs received such information regularly in 2018.
The Report on Wage Practices 2018 is available at MOM’s website.
